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Category: Case Study

Subcategory: Business

Level: College

Pages: 1

Words: 275

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Tier 4 Consumers
When it comes to conducting business activities, the primary agenda for the entrepreneur is the maximization of profit through breaking even. The consumer is a vital component of the market as they are ones who purchase the commodities belonging to companies and as a result, the firm earns revenue. However, the inequality in income distribution has resulted in the categorization of the global consumer into different tier depending on the individual purchasing power of each group. The presence of ht widening gap between the haves and have-nots has led to the incorporation of new strategies. This will involve the focus on the tier 4 consumer that comprises of the markets and economies of underdeveloped countries. I think this opportunity that multinational companies have of venturing into new markets will culminate in increased sales and expansion of operations (Prahalad 460). According to the statistics, the consumers in this category are attributed to a purchasing power below $ 1500. Although low-income levels characterize them, they amount to more than four billion people of the world population. From an economist’s point of view, this, in turn, reflects a significant market base that will consume commodities from the MNCs.
This could be the reason behind the establishment of manufacturing plants in developing countries by companies such as Unilever PLC. Apart from the population…

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